The anti-fraud office of the European Union OLAF has discovered abuses of EUR 32 M of SAPARD Program funds in Bulgaria as well as political cover-up of certain persons involved in these frauds.

This becomes clear from an official letter by the OLAF Director-General Franz-Hermann Bruner accompanied by a devastating report, sent to Bulgaria's Deputy PM Meglena Plugchieva two weeks ago.

The letter was presented by Plugchieva to the Supreme Judicial Council on Tuesday because it also criticized the judicial authority in the country.

Apart from the amount of the revealed SAPARD abuses, OLAF points to the fact that certain persons involved in them, mainly the so called "Nikolov-Stoykov Group", enjoyed a cover-up by certain political institutions and/or officials.

"OLAF believes there are influential forces in the Bulgarian government and/or the Bulgarian state services which have no interest in the punishment of any person from the Nikolov-Stoykov Group", Bruner's letter states.

The "Group" in question is related to the notorious businessmen Mario Nikolov and Lyudmil Stoykov, who were detained a year and a half ago after OLAF alerted the Bulgarian authorities that they had drained EUR 7,5 M of SAPARD funds.

Nikolov and Stoykov as well as their four accomplices were released soon after that. The investigation on the case is allegedly still going on but no suits have been filed.

According to OLAF, the Nikolov-Stoykov Group is "a criminal network of companies, which includes more than 50 Bulgarian, European, and offshore firms". It is said to be especially flexible, and to have been involved in a number of illegal activities.

"This network is managed and financed by Nikolov and Stoykov, who are said to have close relations with the present Bulgarian government. One of them has allegedly funded the election campaign of the current Bulgarian President, and is a business partner of a former Deputy Minister of Foreign Affairs, who has tried to influence an investigation in progress against this person", the OLAF Report reads.

The former Deputy Minister in question is the person, who was discovered to use several names - Petar/Feim Chaushev, who was on the governing board of the Duni Resort Complex, while being a member of the Bulgarian government from the quota of the ethnic Turkish Movement for Rights and Freedoms.

The Duni Complex used to be owned by Lyudmil Stoykov but its ownership has recently been transferred to two offshore companies.

OLAF reports that under one SAPARD Program project, the Nikolov-Stoykov Group sold old meat processing equipment made in the former East Germany to its accomplices in Germany.

After that the equipment was returned to Bulgaria and "sold" as new to five firms related to Nikolov and Stroykov, which applying for SAPARD funding and presented the equipment at much higher prices. The project was for EUR 6 M.

According to OLAF, the Bulgarian Prosecutor's Office has reported that the beneficiaries of five other SAPARD Projects for EUR 1,8 M have presented false information, and might be related to the Nikolov-Stoykov Group.

OLAF also has information about 17 other approved SAPARD projects for EUR 18 M related to the Group, which have been frozen and are under investigation.

The Nikolov-Stoykov Group is also revealed to have imported a large amount of rabbit meat from China to France, Germany, and Spain with fake health certificates from Argentina. The meat could be potentially dangerous for people's health, and OLAF is still investigating the case.

The Report criticizes severely the Bulgarian authorities with respect to the control on the spending of SAPARD funds.

It states that the State Agriculture Fund, which is also Bulgaria's SAPARD Executive Agency, has not started the procedures for the return of the money awarded to the Nikolov-Stoykov Group even after it had all evidence for a committed fraud.

The Prosecution officers are scolded for not having informed OLAF and the respective EU member states about the rabbit meat affair of the Nikolov-Stoykov Group.

The OLAF information states that a Bulgarian court had ordered the State Appropriations Agency to free assets for BGN 3 M belonging to persons related to the Nikolov-Stoykov Group.

The OLAF Report is based on an inspection carried out between June 9 and June 20, 2008. It recommends that Bulgaria analyzes all SAPARD projects and to investigate all violations.

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